Spirit Airlines has been in a financial mess for quite some time, having declared Bankruptcy for the second time in less than a year a few weeks ago and recently announced plans to furlough a third of its crews.
Now there is a new update from the airline, and it isn’t any better. Spirit is currently planning on cutting over half of its fleet as it tries to shrink its way to profitability.
Spirit is Cutting 114 Planes from its Fleet
I’ve gone on record on this site stating that I don’t believe Spirit will be around in its current form within the next year. While this isn’t exactly what I was referring to, it is a massive shakeup for the carrier.
Spirit currently operates a fleet of 214 Airbus A320 family aircraft with more on order. Most of these aircraft are leased and Spirit is planning to reject the leases on 114 aircraft as part of the most recent proposal submitted to the bankruptcy court:
- Spirit is planning to reject leases on 87 aircraft, this represents roughly 40% of the carrier’s fleet.
- Spirit has already rejected leases on 27 aircraft as part of an agreement with AerCap to resolve a dispute regarding airplane deliveries scheduled for 2027 and 2028.
This fleet reduction is expected to save the airline hundreds of millions of dollars as it works to shrink its way to profitability.
Can Spirit Turn Things Around?
With the recently announced capacity cuts, staff furloughs, and reductions in aircraft, the new Spirit is going to look radically different from the carrier we know today. The smaller footprint will no doubt lead to route cuts and could possibly see the airline leave some markets entirely.
Unlike fellow ultra-low-cost carrier (ULCC) Allegiant, which only operates point-to-point flights, Spirit has a not insignificant number of connecting passengers. With potential route cuts, this could further erode profitability even on its most popular routes.
Spirit is facing many challenges in its effort to return to profitability. Its competitors smell blood in the water and are adding new routes that directly compete with Spirit. The carrier also doesn’t have the best reputation (though based on my experience this isn’t really fair) which has kept customers from booking it in the past.
Ultimately, while these changes are a step in the right direction, I still believe that a merger or a liquidation are the only two paths forward for Spirit.
Summary
In an effort to shrink its way to profitability, Spirit Airlines is cutting 114 aircraft from its fleet. The Florida based ULCC is currently undergoing its second Chapter 11 Bankruptcy in less than a year and I’m having a hard time seeing a viable path forward for the airline.